Joint credit cards don't dissolve with divorce

Removing one person from a jointly held card typically isn't done

Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

Dear To Her Credit,
How can I remove my husband from my Bank of America Visa
credit card that we have jointly? The bank says to close it and re-apply. We
have been married 17 years. We are getting divorced.

This was my card, and I added him to it years ago. I don't
want to start over because I need the credit and credit rating. It also has a
lot of mileage rewards on it. Besides, I don't make much money now, so I may
not even qualify. Both my husband and I have very good credit scores with no
outstanding debts. -- Teresa

Dear Teresa,
The bank has the last word on this one, I'm afraid.

If your soon-to-be ex were only an authorized user on this
card, it would be easy to drop him. As a joint account holder, however, the
bank is counting on both of you to pay off any debts on this card. Despite the
fact that it was your card originally, they have been extending credit with two
people responsible for paying it and can choose not to let one of them off the
hook.

Divorce court can't help much, either. Divorce settlements commonly
specify which spouse gets a credit card and the accompanying debt. But the bank
is not party to the divorce, and the divorce court cannot change terms of the
credit card contract. Between divorce law, contract law and a couple of ex-spouses
still stinging from a recent divorce, you can see how leftover joint accounts
can turn into nothing but trouble. Closing the account down and starting over
starts to sound like a good idea!

You shouldn't have to lose your mileage points, however. One
option, of course, is to use them before you close the account. That's what
you've been saving them for, right? If you can't do that, you may be able to
transfer them to your new account or gift them to family or friends. You can
even donate your miles to charity, either directly to organizations like the
Red Cross, or through MileDonor.com, an online connection point between
charities that need mileage points and donors. Be sure to transfer or donate
your miles before you close your account.

If the account has a balance, try to get it paid off with
assets from the divorce. The credit card company can and will try to collect
from both of you, regardless of who ran up the bill or who the divorce court
said should pay it. This is true even if the account is "closed," but
still has a balance.

With your good credit, you should be able to get a credit
card on your own even with a reduced income level. The amount you can borrow
will probably be much less than your previous limit, but that can work to your
advantage. Credit cards are great payment tools. They make lousy long-term
loans. A card with a low limit gives you all the advantages of plastic without the
temptation to let the balance build up -- as almost everyone who has had a
credit card has experienced at one time or another.

You won't lose your credit history from this card by closing
it. Just as you cannot erase bad credit by closing an account, you don't lose
your history of being a good customer, either. You may have less available
credit, which can adversely affect your credit score, but if you keep your debt
balances close to zero, this shouldn't be a huge issue.

Another thing to remember about your credit score is that it
only matters when you use it; for example, when you apply for a loan or credit
card, try to get into an apartment or sometimes when you apply for a job. It's
not affected by your income level, and it's not a judgment of you as a person.
Take your time building it up as a single person. The best way to improve a
credit score is slowly and steadily over the years. Good luck,
and take care of your credit!

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